In the era of smart phones, tablet computers and connected devices, mobile data traffic is increasing exponentially. Spurred by consumers that are constantly consuming music, games and video over cell phones, mobile data traffic is projected to climb 61 percent by 2018, to 190 exabytes annually.

This growth in traffic is felt by everyone, from content providers, to service providers to consumers. During live sporting events such as the Super Bowl, or the premiere of Game of Thrones, providers are struggling to meet the escalating bandwidth demands placed on the network, despite ostensibly preparing for this “rush hour traffic” for months. The challenges associated with unpredictable consumption and accommodating this influx of viewers is largely due to how costly it is to instantaneously adjust the capacity and functionality of existing internet infrastructure assets.

As consumer’s bandwidth demands and quality experience expectations are increasing, service providers’ operational expenditures (OpEx) also are growing at an average rate of 11 percent each year. To address the needs of end-users and provide new, more lucrative services, operators are increasingly looking at adopting several new technology innovations to reduce their OpEx and improve their bottom line – virtualizing many of their network functions is one of such innovation.

How can the industry meet this challenge?

The principal challenge confronting operators today is meeting massive bandwidth demands across an increasing array of devices and products that have different traffic needs, while ensuring they’re driving down their own CapEx and OpEx. There is a limited amount of spectrum available and the current cost per bit for delivering mobile data is quite high – on an avg approximately $2 or $3 per 1Gbps of mobile data, compared to $1 or little less for the same amount of data on wireline broadband, according to Cisco’s Monitization and Optimization Index Forecast .

When building out national mobile networks, most service providers are facing increased coverage and bandwidth demands with more users in a given town or neighborhood who require more bandwidth over time. This means that the individual coverage within the cell area goes down and service providers are splitting a set amount of bandwidth among a growing number of people; thus, each individual’s share of available data capacity per cell is going to decrease over time, as number of people consuming data increases. Obviously, this problem is exacerbated by the fact that consumers are demanding more data, not less.

To correct this, many operators have begun deploying solutions such as small cells and Wi-Fi as part of their broader plan to manage this exponential growth. Macro cells, or traditional cellular towers, have a higher deployment cost and, though they cover a wider footprint, may not be the right strategic fit for highly populated areas or in facilities such as malls or stadiums.

As operators evolve their architectures and solution offerings to meet the growing demand, it’s critical that they do not increase the complexity of managing and operating those networks and ensure architectures seamlessly communicate with one other and effectively onload and offload services to consumer devices. Carriers can no longer build out networks out in silos; networks must be interoperable and optimized, with a focus on operational simplicity.

One way of addressing these evolved needs is to virtualize many of the functions of the network. Traditionally, wireless carriers have been leveraging customized hardware to deliver various services both in Radio Access Network and their Packet Core. But moving forward, network function virtualization must be an increasingly important part of their strategy.

Are operators embracing this move toward virtualization?

Most operators are planning to adopt virtualization in one way or another. According to a recent Infonetics survey, 93 percent of all operators have plans to deploy Network Functions Virtualization (NFV), a network architecture that proposes uses IT virtualization related technologies to virtualize network functions , in some capacity. Virtualization; however, is only part of a strategy, it is not the strategy. Instead, operators must decide on a desired business outcome and map out a plan of attack that meets their goals. For example, if providers want to offer new data rates and packages, they may choose to virtualize their packet core, which working in conjunction with their existing physical infrastructure, could offer operators the flexibility to create data packages that are not economical under their existing model. That said, it’s imperative that providers evaluate what makes sense to virtualize and what does not – a “one size fits all” approach to network virtualization will not work.

Another benefit of network virtualization is the agility it enables. . Consumers are becoming increasingly savvy and are relying on new sources of data and entertainment consumption, such as Netflix or HBOgo. For service providers, these viewing habits present new obstacles, as well as unexpected opportunities. To avoid incurring significant capital and operational expenses, operators must be able to add in and remove services instantly. If service providers virtualize portions of their network, they have the flexibility to elastically scale their resources up or down to address needed bandwidth issues and user demand. The ability to better manage services arms service providers with significant OpEx savings in the long term.

What will the industry look like moving forward?

While most operators are planning to leverage virtualization in their networks, they will roll out services at different speeds to address different pain points and use cases. For example, some operators are already embracing new machine-to-machine (M2M) applications, driven by the growth of the Internet of Things (IoT). They’re already delivering high-speed wireless access to vehicles or bringing wearable devices such as smart watches and fitness monitors online. Each device requires new functionality from the network. So we’re certainly seeing NFV happening in the near term.

To thrive, service providers must integrate new services and capabilities and roll them out at a much higher speed than in the past. Virtualization empowers operators to become more experimental and agile. Currently, it often takes several months for service providers to introduce new services for consumers and businesses, but with a virtualized network, they can introduce new services at a fraction of that speed. Once operators have swifter, more nimble infrastructures in place, the monetization of these services becomes a much simpler process.

Additionally, as service providers virtualize their networks, the processes of service orchestration and automation become simpler and more nimble. Service orchestration allows operators to coordinate the provisioning and reuse of their physical and virtualized computing, storage, and network resources from shared pools. Operators can then use the network to help ensure that applications are dynamically supported throughout the infrastructure, contributing to a faster time to market for new services and a more seamless, less costly process for providers.

Whether it is additional bandwidth for streaming content during live sporting events, or location-based coupons in malls and shopping centers, network virtualization will enable operators will become more innovative in delivering value-added services.

About the Author

As Senior Director of Marketing for Service Provider Business at Cisco, Sanjeev Mervana is responsible for setting and executing the strategic direction of products and solutions for Cisco Service Provider Solutions and Architectures around SDN/NFV, Evolved Services Platform, Evolved Programmable Network ( EPN) , Mobility, Cloud and Video for Cisco’s global service provider customers.

Sanjeev has been with Cisco for over 16 years and has authored various publications, blogs as well as a Cisco Press Book “Design Principles of DSL Based Access Solutions.” With over 25 years of experience in networking , Software & Solutions , Sanjeev has held prominent roles leading innovative architectures and solutions around Software, SDN, NFV, Broadband Aggregation, IPTV Carrier Ethernet and Mobile IP RAN business within Cisco.

Sanjeev holds a Bachelor of Engineering in Electronics from Pune University and currently resides in San Jose with his wife, daughter and son.

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